Maximum you can put into other Cash ISA if you pay £200 a month into HTB Isa?

alinkliter

I'm not sure if you can open another cash ISA if you already have a help to buy ISA. Although you can pay £20,000 per year into a cash ISA, its only £2,400 per year in a help to buy ISA. Are you allowed to open a separate cash ISA ?

figgyc

No, because the help to buy ISA is a cash ISA and you can only put money in one ISA of each of the four types (see this and this). That is one cash, one stocks and shares, one innovative finance (not very common), and one lifetime. Yes confusingly the lifetime ISA is a different type of ISA even though it serves a similar purpose to the HTB. There is a good MSE explainer on HTB vs LISA here.

However this is changing in April 6th/new tax year, when the new rules come in you will be able to have multiple ISAs of the same type.

Depending on how much is in your HTB at the moment and how far into the future you want to buy a house, you might want to consider transferring to the lifetime ISA instead due to the higher annual deposit limit of £4000, and the higher house price limit of £450k. Although there are downsides namely the non-house/retirement withdrawal penalty. Doing a HTB to LISA transfer uses the LISA limit, but not the ISA limit, so you can only transfer £4k a year but you would still have £20k allowance left to put in a cash ISA or other ISA. You can't use both to buy a house, so you'd need enough time to transfer all the money in your HTB if you want to use it all. Also the LISA has to be open for a full year before you can use it on a house purchase.

If you want to use your this year's ISA allowance now, you may want to consider putting money into a S&S ISA (if you haven't already), not investing it (it'll earn probably comparatively little interest in your provider's cash account for the next few weeks) and then transferring it to a cash ISA in the new tax year. As the S&S ISA is a different type to the cash ISA (which your HTB ISA is) you can open one in the current tax year. Do make sure your potential cash ISA provider accepts cash transfers from stocks and shares accounts.

eskbanker

alinkliter said:

I'm not sure if you can open another cash ISA if you already have a help to buy ISA. Although you can pay £20,000 per year into a cash ISA, its only £2,400 per year in a help to buy ISA. Are you allowed to open a separate cash ISA ?

As well as the approaches identified above, one other possibility is that if your HTB ISA is with one of the small number of ISA providers who support the 'split ISA' concept, you can open another cash ISA with them:

https://www.moneysavingexpert.com/savings/best-cash-isa/#accordion-content-620297425-5

And, at the risk of seeming pedantic, there's no restriction on how many ISAs you can open, but there are (currently) restrictions on how many you can pay new money into....

Rich2808

Thankfully this problem goes away from 6 April - as you can pay into a HTB and also multiple other cash isas with various providers up to your £20,000 tax free limit during the same tax year.  If your HTB isa is with a split/portfolio isa provider though (e.g. Nationwide) - as highlighted above - you can pay into multiple cash isas with that provider this tax year including your HTB isa. 

The current chaotic, confusing system which causes stress and problems due to admin errors etc is finally coming to an end from the 2024-25 tax year!